Centre increases tax on liquor

The Central government has increased the Tax Collected at Source (TCS) on the sale of alcoholic beverages for consumption from 1 percent to 2 percent, as announced in the Union Budget 2026–27. The move is part of a broader rationalisation of the TCS and Tax Deducted at Source (TDS) framework across select categories of goods.

TCS is a levy collected by the seller at the time of sale and deposited with the government on behalf of the buyer. The increase in the TCS rate is expected to raise the effective tax incidence on alcohol transactions and could translate into higher retail prices, depending on how the additional cost is passed on through the supply chain.

The increase in TCS remains the most significant budgetary change directly affecting alcohol consumption and trade.